RIO DE JANEIRO, Jan. 10 (Xinhua) -- Brazil's annual inflation rate fell to 2.95 percent in 2017, the country's statistics agency IBGE said on Wednesday.

The figure marks a significant drop from the 6.29-percent rate registered in 2016, and represents the first time the country's annual inflation rate has fallen below the lower limit of the government-set inflation target, which was three percent for 2017.

Inflation also fell to a 19-year low, since the rate registered 1.65 percent in 1998, according to Agencia Brasil.

IBGE attributed the dip in inflation to a decrease in prices of food and beverages, which represent the bulk of Brazil's inflation index, the National Broad Consumer Price Index (IPCA).

In 2017, Brazil saw a larger than usual agricultural harvest that led to a 30-percent increase in production, and a subsequent drop in food prices.

Other products registered a rise in prices this year, such as gas for cooking (16 percent), health insurance (13.5 percent) and daycare (13.2 percent). Home electricity bills and gasoline rose 10.3 percent, respectively.

IBGE expects a higher inflation rate this year, due to food prices returning to their regular levels.